Whether the date of approval for use of the building falls under the time of supply for services;

The time of supply for services based on the contract to be paid on the basis of the failure to pay the price due to the failure to pay the price due to the failure to pay the price shall be the time of supply for each portion of the price, and the time of supply for services on the unpaid construction price shall be the date of approval for the use of buildings stipulated in the contract.

Time of supply for services under Article 22 of the Enforcement Decree of the Value-Added Tax Act

2016Guhap10676 Disposition of revocation of Value-Added Tax Imposition

○ Construction Corporation

○ Head of tax office

September 12, 2017

October 24, 2017

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

On February 23, 2016, the Defendant revoked the imposition of value-added tax of KRW 38,644,180 (including additional tax) imposed on the Plaintiff on February 23, 2012.

1. Details of the disposition;

A. On March 4, 2011, the Plaintiff entered into a contract (hereinafter “instant contract”) with KimA to conclude a contract for the construction of the building (hereinafter “instant construction”) at KRW 1,550,00,00 in the cost of the construction (hereinafter “instant construction”) on the land, ○○○○-dong, Incheon, 109-202, and 3 parcels (hereinafter “instant construction”).

B. On July 30, 2012, the Plaintiff entered into a contract with KimA to change the construction cost to KRW 1,695,930,000 (excluding value-added tax) (hereinafter “instant modified contract”).

C. On August 22, 2012, the head of the Incheon Metropolitan City ○○○○ Office approved the use of the instant building.

D. On the other hand, on December 28, 2015, the Defendant: (a) deemed that the Plaintiff did not issue a tax invoice at the time of supply for the remainder of KRW 236,94,00,00, excluding the previously paid construction cost of KRW 1,695,930,000 under the instant modified contract; and (b) notified the Plaintiff of the imposition of value-added tax of KRW 38,64,180 for the second period of value-added tax, 2012, on the ground that the Plaintiff omitted the return of value-added tax without issuing the tax invoice at the time of supply (approval date of use approval

E. Accordingly, the Plaintiff filed a request for pre-assessment review with the Defendant on February 18, 2016, but the Defendant decided not to accept the said request. On February 23, 2016, the Defendant issued a correction and notification of value-added tax of KRW 38,64,180 (including additional tax) for the second period of February 23, 2016 to the Plaintiff (hereinafter “instant disposition”).

F. The Plaintiff appealed against the instant disposition and filed an appeal with the Tax Tribunal, but the Tax Tribunal dismissed the said claim on October 28, 2016.

Facts without any dispute, Gap's 1 through 6, 10 through 13, and the purport of the whole pleadings.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

1) The service of this case constitutes a base payment service under Article 9 of the former Value-Added Tax Act (amended by Act No. 11608, Jan. 1, 2013; hereinafter the same shall apply) and Article 22 subparagraph 2 of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 24359, Feb. 15, 2013; hereinafter the same shall apply) and the time of supply for the service is determined to be paid the price. According to the contract of this case, the plaintiff can claim the construction cost when passed the inspection conducted by the contractor. Thus, the time of supply for the service of unpaid construction cost comes at the time of filing a civil suit against the plaintiff on the premise that the date of completion inspection requested by the contractor for the payment of unpaid construction cost is 160 days (the date of the above contract of this case, which is substantially demanding the change of the construction cost under the contract of this case, which becomes final and conclusive 16 days (the above contract of this case). 2016 days).

2) In addition, the National Tax Service repeatedly expressed the opinion that "if the price is determined by the court's ruling, the time of supply for the service in question shall be when the price is determined by the court's ruling," and the Plaintiff, trusting the expression of opinion by the National Tax Service, was determined to issue a tax invoice for the unpaid construction cost, i.e., when a civil lawsuit between the Plaintiff and KimA is finalized, e., when the remainder of the construction cost is determined. Article 18 (3) of the Framework Act on National Taxes provides that "after the interpretation of tax-related Acts or the practice of national tax administration is generally accepted by the taxpayer, the act or calculation according to such interpretation or practice shall be deemed legitimate, and no tax shall be imposed retroactively by a new interpretation or practice." Thus, the disposition of this case on the premise that the time of supply for the unpaid construction cost is against the principle of equality and the principle of trust protection, and Article 18 (3) of the Framework Act on National Taxes (section 2).

(b) Related statutes;

Attached Form 1 is as shown in attached Table 1.

C. Determination

1) Determination as to the first proposal

A) Comprehensively taking account of the respective descriptions of Gap evidence Nos. 5, 6, 10, and 13 and the purport of the entire pleadings, D:

Recognizing the facts such as negative.

(1) The main contents of the instant contract are as shown in attached Form 2.

(2) The main contents of the instant amendment agreement are as follows.

Conditions of Special Agreement on Construction Contracts

1. As to the increase in construction expenses (excluding surtax);

Of KRW 170,00,000, excluding KRW 15,000,000 and equipment materials 9,070,000;

145,930,00 won and thereafter there shall be no further increase.

4. As to the progress payment

A project owner (GaA) shall preferentially pay the construction cost with a loan against construction of permanent buildings in the financial sphere after the approval of completion is granted.

5. Effectiveness;

The relevant modified contract shall take effect from the date of approval for use of the building.

(3) The KimA filed a lawsuit against the Plaintiff on April 9, 2015, claiming the payment of damages in lieu of the repair of defects, return of unconstruction costs and unused construction costs, payment of liquidated damages, payment of warranty bonds and return of loan, etc. The Plaintiff filed a counterclaim against the Plaintiff on which the Plaintiff seeks the payment of unpaid construction costs (Seoul District Court Decision 2013Da30673, 2013 Gohap30680) and the appellate court of the said lawsuit [Seoul High Court Decision 2014Na20468, 204475 (Counterclaim)] (Seoul High Court Decision 2014Na20468, 204475)]. The court dismissed the Plaintiff’s claim against the Plaintiff on August 30, 2012 through April 9, 2015 that “The first instance judgment is 6,575,799 won and the remainder of the Plaintiff’s claim against the Plaintiff on the annual interest rate of 20% from the next day to April 9, respectively.

However, in the final appeal of the above lawsuit (Supreme Court Decision 2015Da214691, 2015Da214707) on October 29, 2015, the court rendered a judgment that "the amount equivalent to value-added tax on damages in lieu of defect repairs and the amount equivalent to occupational health and safety management expenses shall be reversed, and this part of the case shall be remanded to the Seoul High Court." The remaining appeals of KimA and the plaintiff's appeal shall be dismissed, respectively." After the reversal and return, the appellate court [Seoul High Court 2015Na20109 (principal lawsuit), 2015Na200,000 until June 11, 2016 (Counterclaim)] rendered a judgment that "the plaintiff shall pay the remainder of the damages in lieu of defect repairs to KimA, in addition to the amount equivalent to value-added tax on the main lawsuit and counterclaim." The plaintiff shall pay the remainder of the damages in arrears at the rate of 15% per annum from the date following the date of the above payment.

(4) On August 22, 2012, the head of the Incheon Metropolitan City ○○○○ was approved to use the instant building, and the Plaintiff submitted a completion system to KimA on September 6, 2012 via a supervisor.

B) Article 9(2) of the former Value-Added Tax Act stipulates that the time of supply for the service shall be determined by the Presidential Decree when the time of supply for the service is provided, and Article 22 of the former Enforcement Decree of the Value-Added Tax Act, upon which the provision of the service is completed (Article 1). Article 22 of the former Enforcement Decree of the Value-Added Tax Act provides that, in the case of ordinary supply, where the provision of the service is completed (Article 1), where the service is provided on completion basis, interim payment, long-term payment, or on other terms, or where the service is continuously supplied via an indivisible unit, the payment of each portion is made (Article 2). Where the provision of subparagraphs 1 and 2 is not applicable, the time of supply for each service is completed and the price of supply is determined (Article 3). Accordingly, in exceptional cases where it is deemed that the time of supply has not arrived even after the provision of the service is completed, the price of supply is determined upon completion of the service (Article 22(3) of the former Enforcement Decree).

On the other hand, the facts acknowledged in the final judgment of a civil case related to this in the tax judgment are the flexible evidence unless there is a special reason (see, e.g., Supreme Court Decision 95Nu3398, Oct. 13, 195).

C) Examining the facts in light of the aforementioned legal principles, the time of supply for services under the instant contract, the payment of which was made upon the completion of the construction work upon the completion of the construction work, constitutes the supply of services under Article 22 subparag. 2 of the former Enforcement Decree of the Value-Added Tax Act, and thus, the time of supply is determined upon the completion of the construction work. As seen earlier, the time of supply for the services related to unpaid construction cost ought to be the time of supply for the services. As long as the construction work was completed upon the completion of the construction work upon the completion of the construction work under the contract, and the use was approved upon the completion of the construction work, the time of supply for the services is determined upon the completion of the construction work. Thus, even if the lawsuit was filed by the Plaintiff and KimA against the dispute over the settlement of the construction price, and the remaining payment was determined upon the court’s conciliation decision, this is merely a matter of damages due to the completion of the construction work and the delay of construction work. Accordingly, the Plaintiff’s title of supply for the services is not reasonable.

2) Determination on the second proposal

The principle of good faith or the principle of prohibition of retroactive taxation under Article 18(3) of the Framework Act on National Taxes applies only to cases where there are special circumstances acknowledged as satisfying the justice of protecting taxpayers even if they sacrifice the principle of legality. The interpretation of the tax law or the practice of national tax administration, which is generally accepted by taxpayers, refers to a case where erroneous interpretation is accepted by a general taxpayer, who is not a specific taxpayer, as legitimate, and it is not unreasonable for taxpayers to trust such interpretation or practice. The mere fact that there was a public opinion on the standard of interpretation of the tax law does not necessarily mean that such interpretation or practice exists, and the burden of proof as to the existence of such interpretation or practice is the taxpayer (see Supreme Court Decision 2002Du4051, Sept. 5, 2003).

According to Gap evidence Nos. 15 and 16, it is acknowledged that the National Tax Service asked a question on September 15, 2005 and December 26, 201, that "if the price is determined by a court decision because an entrepreneur operating construction business provides construction services and the parties dispute over the price, the time of supply for the relevant construction services is determined by the court decision," but it is difficult to confirm whether the issue of the National Tax Service questioning by the plaintiff is identical to the case of this case merely by the statement of evidence Nos. 15 and 16, and it is difficult to view that the interpretation or practice, such as the above questioning reply, is generally accepted by the taxpayer. Accordingly, the plaintiff's second chapter is without merit.

3. Conclusion

Thus, the plaintiff's claim is dismissed as there is no ground.